Oil and gas has always been seen as a slow adapter of technology, especially as other labor-intensive industries have grown more and more digitalized. However, this stereotype is increasingly fading, with oil and gas companies introducing a myriad of different technological changes into their way of doing business. The change couldn’t come any sooner, as the COVID-19 pandemic forces more and more industries inside, and oil prices continue to drop with the increasing glut in the market.
Oman is quickly realizing the usefulness of today’s technology for its own oil and gas prospects. Today, around half of Oman’s oil reserves are made up of heavy oil, out of which, according to Oman Times, only 2% is extracted, due to the heavy costs and technology needed for its production. Furthermore, Oman’s oil and gas market has had a rocky five years, though its market saw a bit of resurgence during 2018. Unfortunately, quarantines put in place across the world to stem the pandemic have come at a blow to oil markets; the situation was not helped by the short-lived Saudi-Russia standoff in March 2020. As such, current prices of oil have left smaller Omani players strapped for cash. Still, the country’s stability in the middle of a volatile region makes it an attractive place for investors to pin their hopes on. For companies to best take advantage of the current situation, exploration, extraction, and production costs must be kept as low as possible. It is in this area that technology is of particular usefulness.
Halliburton’s Country Vice President Zeinoun Klink explains in his TBY interview that technology is particularly advantageous when working in older fields: “The majority of oil (in Oman) comes from mature fields that have been producing for a while beyond their peak, and technology is needed to boost productivity.” As such, the company has been expanding and perfecting its enhanced oil recovery (EOR) processes to help customers make the most of their fields. Another key technology comes in the form of smart technology, both in the drilling and other oilfield processes. Klink says that geosteering technologies provide 3D overviews of drilling in real time, thus allowing for “optimal well placement in the thinnest reservoirs and access to the productive rocks to enhance recovery.”
These geosteering technologies form part of the smart technology push in the sector. Especially important for keeping the industry sustainable will be smart drilling, which will aid companies in understanding when, where, and how to exploit fields, especially in exploratory phases. Meanwhile, the deployment of smart oilfield technology will allow companies to obtain critical data in real time, without any lag. Not only will this allow operators to make decisions faster and better, but it will eliminate the need for contractors to be on-site to fix any problems. This will become increasingly important as the extent of quarantine measures globally expands.
Oil and gas companies are also turning to online sharing platforms to create open pools of sector knowledge and expertise. As Murtaza Jariwala, CEO of Vanguard Oilfield & Engineering Services, explained in his TBY interview, companies in the sector often rely on internal knowledge or consultants to provide the solutions needed to overcome challenges. However, thanks to platforms like OGES, researchers and experts in universities and on the ground can connect and collectively solve problems. This increased sharing should also influence R&D in the sector as well. According to a TBY interview with Sohail A. Mikrani, Deputy General Manager of Maktoom, “to get most return from the well, we must strike an optimal balance between production cost and production performance; by investing in R&D, we can do so.”
McKinsey Global Institute’s 2020 new technologies report estimated the economic impact of advanced oil and gas exploration and recovery techniques to stand at USD100-500 billion by 2025. Furthermore, it estimates these technologies will bring between 3.6 and 6.2 billion oil-equivalent barrels of oil and gas by that same year. Even with the virus’s impact still unknown, increased technology in the sector will help the industry globally reach these numbers. But, in order for companies to best utilize technology’s inherent exponential growth advantage, changes should be brought in sooner rather than later.